BVN: Court relaxes conditions to unfreeze unlinked accounts

The Federal High Court in Abuja on Wednesday modified its orders made on October 17, 2017 directing the 19 commercial banks in the country to freeze all accounts without Bank Verification Numbers.

Following a compromise reached between the lawyers to the Federal Government and 19 commercial banks during Wednesday’s proceedings, Justice Nnamdi Dimgba “revised” the earlier ruling by directing banks to immediately unfreeze accounts that had since been linked to a BVN after the orders were made.

The judge also revoked the Order Number 5 in the ruling, which had directed an interim forfeiture of the proceeds in all the accounts without the BVN pending the determination of the substantive suit.The applicants in the suit marked FHC/ABJ/CS/911/16 – the Federal Republic of Nigeria and the Attorney General of the Federation and Minister of Justice, Mr. Abubakar Malami (SAN) – were represented by Mr. Joseph Tobi, while the 19 commercial banks were represented by Mr. Adeniyi Adegbonmire (SAN).

Only the Central Bank of Nigeria (the 20th respondent in the suit) was not represented by a lawyer during the proceedings.

In his ruling, the judge noted that the aspects of the order made on October 17 had been posing some “practical problems,” hence the need for the revision by the court.

With the modification of the order on Wednesday, the banks would no longer have to wait for the hearing and determination of the substantive suit to unfreeze the account of any customer that undertook the BVN registration.

He noted that before Wednesday, unfreezing the accounts without BVN even with the account owners visiting the banks to undertake the registration would have amounted to a violation of one of the orders of the court since the ruling did not make BVN registration a pre-condition for unfreezing such accounts.

The judge noted that with the manner the particular order was couched, the freezing order placed on such accounts was to subsist “pending the hearing and determination of the substantive application” and not by the account owner undertaking the BVN registration.

This aspect of the ruling, the judge said, created an “awkward and unfortunate result.”

In view of the modification of the order number 4 in the ruling, the court with agreement of the parties also revoked the order of interim forfeiture of the proceeds in the said accounts without the BVN.

But other orders contained in the ruling as they were made by the court on October 17.

Justice Dimgba ruled, “Court engaged with all counsel to understand the practical problems posed by the Order of October 17, 2017, to the extent that it provides in Relief 4, ‘An interim order of the honourable court freezing the said accounts by stopping all outward payments, operations or transactions (including any bill of exchange) in respect of the accounts pending the hearing and determination of the substantive application.’

“It was generally agreed that this relief as currently couched creates an awkward and unfortunate result such that even when parties have gone to the banks to undertake their BVN registration, they still will not be able to operate the accounts because doing so will be in violation of the order of court.

“Parties agreed that the said Order No 4 should be revised to eliminate this problem, in the interim.

“Having listened to all counsel on record, and with the consent of all parties represented, I hereby revise Relief 4 of the court’s order of October 17, 2017 such that the new Relief 4 shall be: ‘An interim order of the honourable court stopping all outward payments, operations or outward transactions (including any bill of exchange) in respect of the accounts pending the linking of the accounts to a Bank Verification Number.’

“In view of the above agreed compromise revision of Relief 4, I also hereby revoke and set aside Relief 5 of the court’s order of October 17, 2017, which provides for:

“An interim order of forfeiture of the monies in the said accounts without BVN to the claimants/applicants being accounts with insufficient Know Your Customer  guidelines contrary to Section 3 of the Money Laundering Act, 2011 and CBN guidelines the determination of the originating motion on notice.”

Justice Dingba had, on October 17, 2017, upon an ex parte application by the Federal Government, ordered the CBN and the 19 commercial banks in the country to disclose all accounts without the BVN  in their custody and the balances on such accounts.

The court ordered the banks to disclose the details of all such accounts, their owners and their proceeds in their affidavit of compliance deposed to by their Chief Compliance Officers.

It also made an interim order directing the banks to freeze all the said accounts by stopping “all outward payments, operations or transactions” pending the hearing of the substantive application seeking the forfeiture of the balances on the accounts to the Federal Government.

The banks were also directed to disclose “any investments made with funds from these accounts without BVN in any product.”

The court also directed the CBN and the Nigeria Interbank Settlement Systems  “to validate the information contained in the affidavit of compliance/disclosure filed by the respective 19 banks” within seven days from the date of service of the orders on them.

It also, among others, ordered the banks to advertise the accounts without BVN in a widely circulated national newspaper as notice to those who might have any interest in any of the accounts.

But the judge, on Wednesday, revoked the interim forfeiture order placed on the accounts without the BVN and also allowed banks to unfreeze the accounts of customers that chose to comply with the BVN policy even before the determination of the substantive suit.

On Wednesday, some persons seeking to be joined as parties in the suit informed the judge through their lawyer, Mr. Afam Osigwe, that they had filed an application to that effect.

Also, the counsel for the commercial banks, Adegbonmire, informed the judge that he had filed an application to challenge the jurisdiction of the court to grant the totality of the ex parte orders it made on October 17.

He said, “We have an application dated November 7, 2017 and filed the same day. “

Adegbonmire noted that the application had been served on the Federal Government’s lawyer, adding that he would need time to study the application filed by parties seeking to be joined.

The Federal Government’s lawyer, Tobi, confirmed that he was served with the processes earlier on Monday.

All the lawyers conceded to an adjournment.

The judge adjourned the matter until December 11 for hearing